The braided approach
This article was originally produced as a supplementary conclusion for the interim report on the evaluation of the Phoenix Development Fund (PDF) in the UK.
The Phoenix Development Fund has demonstrated that with the right support people in disadvantaged areas and from under-represented groups in enterprise can develop their enterprises and entrepreneurial skills. This is an important finding because it demonstrates that enterprise approaches could be successfully incorporated into a wide range of policies. These policy areas include neighbourhood renewal, the work of the Regional Development Agencies and the delivery of mainstream business support by the Business Links.
The PDF set out to encourage fresh thinking about stimulating enterprise and business support to people in disadvantaged areas and in under-represented groups. This objective has been achieved. Between the 95 projects there is a wealth of experience gained of working with target groups and in disadvantaged communities. But there is also a major challenge to capture the learning from the projects and to ensure that mainstream agencies – in particular the Business Link Operators and the Regional Development Agencies are aware of best practice in this field.
The PDF has also demonstrated that innovation is a process that can be managed in a business support setting. The programme management of the Development Fund has clearly encouraged projects to be bold and brave with their activities, while being careful with the way that they spent their grants.
The PDF projects were also successful at reaching out to particular sections of the community that have been under-represented in enterprise. This was particularly true for women – who made up over half of clients of the projects, and of black and minority ethnic groups. The PDF was less successful at reaching people with disabilities perhaps because only two projects specialising in disability were selected in the first two rounds.
There is evidence from the survey work that a range of approaches have been successfully developed. More projects were active in the fields of outreach and delivering professional training and development and as a result more innovation has taken place in these areas. But useful experience has also been gained by projects working around incubation, business networks, new technologies, and running business centres.
The costs of providing this support have varied considerably between projects especially when looked at in relation to the number of clients supported and the ‘distance travelled’ by those clients. The second phase of the evaluation will explore issues around costs and benefits of different approaches in more detail.
The PDF has also had a transformative impact on many of the projects that it has supported. For the smaller NGO-based projects this funding helped many of them to become serious players in the field in which they operate. In this sense the finance was transformative. For the more mainstream operators, including the Business Links and larger enterprise agencies, the PDF funding enabled many of them to explore areas that their tight target environments normally seem to preclude.
Community-based PDF projects (e.g. Bristol East Side Traders) were prolific in the relationships that they established with the mainstream. Mainstream PDF projects run by Business Links also established important relationships with community-based organisations (e.g. Business Link Hertfordshire, which seconded a member of staff to a Asian Business Association). Despite this commitment to agency-community partnerships among the projects, there are widespread concerns that the mainstream is not taking the inclusion agenda seriously enough. This was evidenced by the few examples of funding partnerships between RDAs, Business Links and PDF projects. Although SBS and the RDAs share a tier 2 target for enterprise in disadvantaged areas there is remarkably little evidence of significant budget allocations to pursue this policy goal either from RDAs or Business Links. It is hoped that the Business Link Pilots, being implemented in three RDA areas, are able to take forward this agenda around enterprise-led approaches more systematically and explicitly than has happened before. This will require targets to be set for diversity and inclusion that are of equal importance to those already established for market penetration, gross value added and customer satisfaction.
The PDF has raised many questions about the operation of mainstream business support services in England, which are taken here to include the Business Link brand of services delivered by a wide range of partnerships under contract from the SBS. In many areas independent Enterprise Agencies are associated with the Business Links through contracting arrangements, and are frequently responsible for delivering start-up support services. There is considerable anecdotal evidence from the research carried out that the existing mainstream system has been insufficiently inclusive in the way that it has dealt with the target groups discussed in this report. Many organisations working with specific target groups and in disadvantaged areas report that the business support system does not serve the needs of their clients. To address these weaknesses the architecture of the future system will need to be sufficiently flexible to embrace the type of street-level work carried out by many PDF projects.
Not all PDF projects were successful and some projects showed high costs of delivery. Further work will be carried out in the second phase to find out the reasons for success and failure and to benchmark the best projects.
The future system for business support: mainstreaming or separate development?
Three positions on a spectrum of business support services are described below to illustrate how the business support system could evolve:
- Separate development of specialist services
- Total mainstreaming
- A braided system
Separate development of specialist services
The option of separate development describes the way that the business support system has largely been evolving up until now. Many organisations have been accessing independent funding that is not controlled by RDAs or the Business Links. Examples of independent funding streams include SRB, ERDF and latterly the EQUAL community initiative and the Phoenix Development Fund itself. Sectoral business support has often trodden this path; the emergence of specialist provision for the cultural industries and social enterprise are both examples. There has also been a strong focus on specialist support for certain target groups – particularly women and BME groups. The increasing mainstreaming of these areas and the development of a raft of government policy for their development has reduced the need to go it alone.
Separate development has major weaknesses as a long-term approach. It fails to deliver good spatial and temporal coverage as many projects are linked to specific funding streams that only cover parts of a sub region and expire after a few years. As an approach it is inherently opportunistic rather than strategic. In its favour it has been responsive and flexible in responding to needs. But critically, the lack of linkage, not least in funding terms, to the mainstream Business Link backbone means that there is rarely a strong connection between the two systems. This can be seen in the lack of referral, client graduation, local contracting or exchange of knowledge about local conditions. Moreover, in the medium- to long-term financial sustainability is likely to be a problem – especially as existing funding regimes such as SRB, Phoenix Fund and ERDF phase out and RDAs exert a stronger grip through their Single Pot and relationships with the Business Links.
It has been in the specialist support areas that that so much innovation has been carried out and where the greatest advances in supporting enterprise in disadvantaged areas and for disadvantaged groups has been made. The challenge is to develop a more nuanced business support architecture that can respond to diverse client needs within a single framework. Finally there are strong forces at regional and national policy level calling for a more mainstreamed approach.
Total mainstreaming is intellectually attractive to national and regional policy makers because at a stroke the crowded platform of support could be ‘tidied up’. But, previous attempts, including the original launch of Business Link suggest that such tidiness might be more in the eye of the policy-maker than the user.
The preliminary results of the PDF evaluation suggest that total mainstreaming would be unable to deliver a service capable of making a difference in raising levels of entrepreneurship among under-represented groups and in disadvantaged areas. This is because the outreach approach used by mainstream agencies is not as localised, proactive and innovative as that offered by more community based organisations. The difficulty of mainstream agencies achieving the level of cultural change needed should not be underestimated - although problems with managing cultural change are not a reason for not trying to make changes inside the mainstream.
It is also likely that important growth sectors and contributors to the UK economy such as creative industries would fail to thrive within a totally mainstreamed approach. The specialist strands of business support have developed because the existing support infrastructure was not meeting the needs of women, minority enterprise, social enterprise and creative enterprises. This message has been constantly emphasised in interviews with agencies and clients and we are satisfied that deep knowledge of the needs of particular client groups and sectors may be found closer to the ground than is possible in a single structure.
The braided approach
The braided approach attempts to bring together the strands of specialist and mainstream business support into a single system that links together the specialist and mainstream agencies.
The idea of a braided system is not new, but it perhaps describes better where the business support system needs to go. It fits well with the idea of Business Link as a brokerage service and would aim to do the following:
- Strengthen links between local specialist organisations and a Business Link
- Integrate the funding and output relationships
- Stimulate stronger two-way relationships so that learning and knowledge transfer both ways
- Use local organisations focus on provision of specialist services either to target groups or areas
- Encourage aspects that can be delivered across larger areas to grow beyond their immediate locality (e.g. women’s and BME support structures)
The key question is to find a new balance between the specialist and mainstream providers so that the system is comprehensible to the user and can provide good spatial coverage in specialist areas. This will require proper mapping of existing provision at Local Strategic Partnership, Sub-Regional and Regional levels to analyse gaps and overlaps. The braided approach is not a euphemism for doing nothing. All parts of the system would need to be adapting to grow into their new roles.
To take the example of women’s enterprise: The braided approach might involve the RDA working with Prowess, Business Links and specialist regional women’s organisations and local partner organisations to define a strategy and set of targets for women enterprise. A second stage might involve using the Prowess Flagship accreditation tool to review delivery by mainstream agencies and other providers and to map the overlaps and gaps in provision. The third stage would be to draw up delivery agreements around pre-start, start-up, existing and growth businesses and to contract for delivery with the most appropriate partners. The delivery itself could happen in a community group, in a Business Link, in a specialist women’s business agency, a generic agency or in the private sector. The braided approach fits well into the brokerage model being developed for Business Links. Following the 2004 budget announcement of the extension of the three RDA Business Link pilots to the other six RDAs a regionally directed braided system linking specialist and generalist providers is within reach.
Significant resources are already going into business support activity. But too few resources reach people that want to start up or grow a business in disadvantaged areas and in groups under-represented in enterprise. The Phoenix Development Fund has demonstrated that there are sound techniques that work to support such clients but these techniques need to become more widespread. But this activity will need to be paid for. A major reorientation of targets and resources will is required to bring the strands together and deliver a comprehensive business support service that delivers whoever you are and wherever you live.